Following the tough PR09 settlement Welsh Water is terminating its operating contracts with United Utilties and Kelda and bringing the operation of its water and wastewater plants back in-house. As a consequence the number of Welsh Water employees has jumped from only 170 to about 2100. New managers for its water and wastewater operations have just been appointed.
This marks a radical change of strategy for Welsh Water. Job losses of about 300 over the next five years will follow as Welsh Water tries to reduce its operating costs by £38 million. The move is not a surprise – its hard to understand why Welsh Water thought that contracting out its core business would save it money – contracting out can be successful where an external provider can bring specialist skills or economies of scale. For Welsh Water’s core operation neither reason applied.
Welsh Water will continue to contract out its capital programme delivery with the core delivery partners, Costains, Morgan Est, Laings , Black and Veatch and Imtech being retained for AMP5.
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